MARKET UPDATE CAREFREE AND PINNACLE PEAK November 2010 MARKET UPDATE CAREFREE AND PINNACLE PEAK

Annual Appreciation (Based on Monthly Average $/SF) SCOTTSDALE Annual Appreciation (Based on Monthly Average $/SF) October 28,2010

Annual Appreciation (Based on Monthly Average $/SF) CAVE CREEK Annual Appreciation (Based on Monthly Average $/SF) October 28, 2010

85255

Comparisons by Zip Code 85331 85262 85255 85254 85266 85086 Sales/mo Previous Month 41  53 25 42 51 72 52 23  20 96 128 Avg. Price/SF $136 n $207 $206 $216 $215 $135 $188  $95 $96 Annual Appreciation -3% h -6% -7% -9% -8% - 8% -5% -11% -2% Listing Success Rate 48% 52% 39% 42% 41% 50% 45% 59% 76% Market Distress Index 55.6% 56.7% 47.9% 38.7% 43.5% 45.8% 54.4% 39.1% 39.7% 66.8% 69.2%

A few observations…. There is a significant disconnect between list price and sales price in the zip codes analyzed The differential range is 10% - 38% with an average of 24% Related to the disconnect between LP and SP is reflected in the listing success rate which ranges from 39% - 59% with an average of 46%

Notes from Cromford Market Summary Dated 11/2/10 6,559 sales (all types) in October Down 2.9% from September Down 11.8% compared to October 2009 October REO sales down 4.4% from September October Short Sales and Pre-foreclosures down 4.2% over September Normal sales increased by 0.5%

Some unusual factors happened in October Suspension of trustee sales by several lenders (i.e. B of A) HUD changed management subcontractor from MCB to BLB which caused a hiatus in new HUD listings in MLS REO inventory would have been 572 higher without the moratorium

BLB Resources, Inc. Summary of Services BLB Resources, Inc. is a small woman owned real estate asset management company specializing in high-volume sales, marketing, managing and listing of HUD and REO properties nationwide. The two principals of BLB Resources have 54 years combined HUD and REO experience. Rod Gaston, CEO, CA Real Estate Broker and AZ Real Estate Agent, has over 5,800 real estate sales since 1976 and has personally sold over 4,400 HUD properties from 1983-1999 in Phoenix, AZ. Rod is a HUD sales and marketing expert with 26 years of experience. Susie Gaston, Owner and President of BLB Resources, Inc., has personally sold over 1,200 HUD properties from 1983-1999 in Phoenix, AZ and holds an AZ Real Estate License since 1981.Susie is a HUD and REO marketing, advertising and sales expert with 28 years of experience.

MCB: Michaelson, Connor and Boul, Inc. MCB did not adequately provide oversight of the closing on the sales of HUD homes. Specifically, it did not always request lead-based paint stabilization services and/or city presale inspections in a timely manner. Further, it did not adequately monitor the closing agents and report to HUD deficiencies with closing sales of HUD home as required under its contract.

Notes from Cromford Continued The effect of the 3 factors noted previously were noticeable but not dramatic We have seen a lull in the REOs being listed in MLS Also, short sales have contributed slightly less to overall sales Cromford states concern that we may see inventory start to rise again.